1. Outline Managing a Business or Organization
Information Technology to Support Managerial Decision Making

2. The Traditional Functions of a Manager
Managers seek to accomplish organizational goals.
Information technology supports managerial functions.

3. The Traditional Roles of a Manager
Managers may need to perform all three roles at one time.

4. Types of Management Decisions
Managers use several methods to solve different types of problems in a variety of situations.

5. Levels of Management

6. Information Requirements of a Manager
Organizational goal:
Provide the right information at the right time in the right form.
Example: semistructured decision about a marketing plan.
Historical sales data
Future-oriented sales data

7. Dimensions and Characteristics of Information: Time
Timeliness
Currency
Frequency
Time period

8. Dimensions and Characteristics of Information: Content
Accuracy
Relevance
Completeness
Scope

9. Dimensions and Characteristics of Information: Form
Clarity
Detail
Order
Presentation
Media

10. Information and Management Levels

11. Information Technology and Managerial Communication
Information technology can:
Increase the number of messages transmitted to more people
Ensure messages go only to those who need the information
Eliminate unnecessary time delays
Vary the form of the message with multimedia.

12. Communication Concepts
Communication is the expression of an idea.
Communication is sent through a channel.
Communication requires a receiver.
Feedback clarifies garbled messages.

13. Collaborative Work

14. Office Automation Evolution
Mainframes were used for accounting and payroll.
Personal computers with office application software became popular.
Power struggles often occurred between mainframe and PC supporters.

15. Office Automation Evolution
Today companies network PCs, mainframes and thin clients together.
Groupware allows sharing calendars, documents and messages among workers.

16. Distributed Computing
Today companies may have PCs, mainframes, workstations and thin clients networked together.
Workers may access mainframe database using their PC or terminal.
Workers may use Web browser to access data on company intranet.
May not even know where the data is stored.

17. Paperless Office
Computers now deliver more mail messages than postal carriers.
The volume of on-line publishing is rapidly growing.
The amount of paper used is not decreasing as much as once predicted, but we do use paper differently.

18. Information Technology and Decision Making
Decision making involves:
Understanding the problem
Identifying possible solutions
Selecting the most desirable solution
Implementing the decision.

19. Types of Decision Making Models
Mental model: how a person’s beliefs, assumptions, and interpretation of reality are organized.
Mathematical/quantitative model: reality represented as numerical relationships among key variables (e.g., budget spreadsheet).

20. Types of Decision Making Models
Analog model: pictorial representation of a situation (e.g., organizational chart, stock market graph).
Iconic model: physical replica of reality (e.g., CAD developed scale model of a product).

21. Individual Decision Styles
Reflect how individuals:
Emphasize certain phases of decision making
Use certain types of models
Use information in unique ways
Emphasize certain beliefs and values.

22. Individual Decision Styles
Rational
Satisficing
Systematic
Intuitive
Bureaucratic
Political
Garbage can

23. Supporting Decision Makers with Technology
Information systems that effectively support decision making will be flexible and adaptable enough to support a variety of individual and organizational styles.

24. Management Information Systems (MIS)
Managers use the system to access corporate business process information.

25. Management Information Systems (MIS)
Give managers the information needed to make decisions about operational activities.
Provide three types of reports: detailed, summary and exception.
Typically provided to managers as scheduled reports.

26. Decision Support Systems (DSS)
Managers can use the system interactively to analyze data.

27. Decision Support Systems (DSS)
Useful for non-routine decisions
Managers manipulate information
Three major components:
Data management
Model management
Dialog management.

28. Group Decision Support Systems (GDDS)
Groups of managers use the system interactively to analyze data.

29. Group Decision Support Systems (GDDS)
Physical configuration:
Room with appropriate computers
DSS database and modeling software
Local area network connections
Large-screen projections of computer output for group viewing
Communication-oriented software tools for idea generation and sharing.

30. Group Decision Support Systems (GDDS)
Prior to the meeting, managers can use the GDDS software to perform sensitivity analysis.
During the meeting, managers can:
Show their earlier work to others
Use GDDS software tools to brainstorm and organize their ideas.

31. Geographic Information Systems (GIS)
Special type of DSS designed to work with map and other spatial information including:
Mapping and analytic software
Databases of map images, geographic and demographic data
User interface allowing queries and results shown on a map.

32. Uses of a GIS A GIS can be used to:
Identify the best location for a new retail store
Analyze customer preferences in a given geographical area
Plan delivery and service routes
Assist governmental employees such as city planners or law enforcement personnel.

33. Executive Information Systems (EIS)
Used to monitor important economic and social trends affecting the company and corporate performance.

34. Executive Information Systems (EIS)
An EIS has similar design components to a DSS
Data management component provides interactive access to data on the company’s critical success factors
Model management component includes analytical models to identify and study trends in critical success factors
Dialog management components provides a variety of output formats.

35. Executive Information Systems (EIS)
An executive can use the EIS to drill down through the available information to the level of detail needed.
Access to up to data internal and external information makes an EIS particularly helpful during the intelligence phase of decision making.

36. Expert Systems (ES)
Expert answers are provided to a user’s questions in an interactive process.

37. Expert Systems (ES)
An expert system supports decision making by providing managers with access to computerized expert knowledge.
Such systems are based on years of artificial intelligence research.

38. Knowledge Bases for Expert Systems
Researchers have had little success at developing systems with broad, shallow knowledge such as known by children.
Researchers have had success when the knowledge base is restricted to narrow, deep domains.

39. Knowledge Base Information
A knowledge base may contain 200 to 10,000 if-then rules, which incorporate uncertainty as “fuzzy” rules.
Example from MYCIN, a medical expert system:
If (1) the infection is primary-bacteremia, and
(2) the site of the culture is one of the sterile sites, and
(3) the suspected portal of entry of the organism is the gastrointestinal tract, then there is suggestive evidence (.7) that he identify of the organism is bacteriodes.

40. Expert Systems in Perspective
An expert system can:
Help train new employees
Reduce the number of human errors
Take care of routine tasks so workers can focus on more challenging jobs

41. Expert Systems in Perspective
Provide expertise when no experts are available
Preserve the knowledge of experts after those experts leave an organization
Combine the knowledge of several experts
Make knowledge available to more people at different locations.

42. Expert Systems in Perspective
Limits of expert systems:
Difficult to build, particularly the knowledge base component
Poorer at planning strategies than human experts
Less creative than human experts
Powerless outside their narrow, deep domain of knowledge.

43. Comparison of System Design Features

44. Information Systems in Perspective
Information systems often do not fit neatly into one of the five information systems discussed (automated office systems, MIS, DSS, EIS, ES).
The design features incorporated into an information system should be based on the communication and decision making needs of users.

45. Information Systems in Perspective
These tools provide information and advice, with some risks.
Poor system design limits decision quality.
Managers may feel overwhelmed with information.
User training is essential.
A system cannot totally replace the human communication and decision-making skills necessary for successful management.

46. After reading this chapter, you should be able to:
Describe several aspects of management, the information needs of managers, and the types of decisions managers make
Explain several basic communications concepts

47. After reading this chapter, you should be able to:
Discuss several ways that information technology is used to help managers collaborate and communicate more effectively
Explain several decision-making concepts

48. After reading this chapter, you should be able to:
Describe several ways that information technology is used to help managers make decisions more effectively
Discuss the issues that should be included in an organization’s information code of ethics

49. TYPES OF INFORMATION SYSTEMS
DATA WORKERS
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR MANAGERS
MANAGEMENT LEVEL MIDDLE MANAGERS
OPERATIONAL OPERATIONAL LEVEL MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE &
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
RESOURCES
MARKETING

50. MAJOR TYPES OF SYSTEMS Executive support systems (ESS)
Decision support systems (DSS)
Management information systems (MIS)
Knowledge work systems (KWS)
Office automation systems (OAS)
Transaction processing systems (TPS) *

51. TYPES OF INFORMATION SYSTEMS
DATA WORKERS
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR MANAGERS
MANAGEMENT LEVEL MIDDLE MANAGERS
OPERATIONAL OPERATIONAL LEVEL MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE &
ESS
DSS
MIS
KWS
OAS
TPS

52. TPS DATA FOR MIS APPLICATIONS
MIS FILES
SALES DATA
UNIT PRODUCT COST
PRODUCT CHANGE DATA
EXPENSE DATA
REPORTS
MANAGERS
TPS
Order Processing
System
Materials Resource
Planning System
General Ledger
ORDER FILE
PRODUCTION MASTER FILE
ACCOUNTING FILES

53. INTERRELATIONSHIPS AMONG SYSTEMS
ESS
TPS
KWS
OAS
DSS
MIS

54. SUPPLY-CHAIN MANAGEMENT-AN EXAMPLE OF PROCESS ALIGNED SYSTEM
CUSTOMERS
PLANNING & FORECASTING
ORDER PROCESSING
SUPPLIERS
INTRANET
PRODUCTION
PROCUREMENT
ACCOUNTING
LOGISTICS SERVICES
SHIPPING
INVENTORY
DISTRIBUTORS